Comment on the OCC’s Fair Access to Financial Services Proposal

I appreciate the opportunity to comment on the recent rule proposal from the Office of the Comptroller of the Currency (OCC) regarding fair access to financial services. The Mercatus Center at George Mason University is dedicated to bridging the gap between academic ideas and real-world problems and to advancing knowledge about the effects of regulation on society. This comment, therefore, does not represent the views of any particular affected party or special interest group. Rather, it is designed to help the OCC as it considers how to implement these policies. Specifically, the comment seeks to inform the OCC as it determines how best to address the issues raised when banking services are withheld strategically as a tool effectively to regulate rather than for traditional business purposes.

I am attaching an article I coauthored with Trace Mitchell, which is relevant to the OCC’s concerns. This article looks at the implications of banks withholding services in order to impede otherwise lawful commerce from occurring.

The article examines part of the “regime of privilege” that public policy provides banks for the purpose of facilitating credit and liquidity in the economy, facilitating payments, protecting bank customers, and preventing collateral damage in the case of bank failure. The paper assesses some of the ways this regime of privilege results in banks enjoying significant benefits that protect them from competition and failure and provide a direct or indirect subsidy in some cases.

The article then considers whether, given this regime of privilege and the critical role banks play in the economy, it is appropriate for banks to attempt to act as de facto regulators. It looks at historical arguments about the role banks can and should play, concerns about the misuse of bank power, and how well banks’ efforts to regulate square with the reasons they enjoy so much privilege.

Finally, the article discusses potential policy changes that could be made to address any problem posed by banks acting as private regulators while balancing other important values, such as freedom of association. Many of the proposed solutions contemplate congressional action, but the OCC may find the general principles valuable.

I hope this article is useful to the OCC in its deliberations. If I can be of further help, please do not hesitate to ask me.


Brian Knight and Trace Mitchell, “Private Policies and Public Power: When Banks Act as Regulators within a Regime of Privilege,” New York Journal of Law & Liberty 13, no. 1 (2019): 66–149.

Additional details

Proposed Rule on Fair Access to Financial Services

Agency: Office of the Comptroller of the Currency

Comment Period Opens: November 25, 2020

Comment Period Closes: January 4, 2021

Comment Submitted: December 11, 2020

Docket No. OCC-2020-0042

RIN: 1557-AF05